Sales reach 775.4 billion won; operating margin at 12%
Auto long-term, short-term and Biz Rental all post gains
High-yield used-car long-term rental share rises to 21.2%
Lotte Rental reported consolidated third-quarter sales of 775.4 billion won ($578 million) and operating profit of 92.9 billion won, the company disclosed Thursday. Sales rose 2.3 percent from a year earlier, while operating profit climbed 4.4 percent.
The operating margin improved 0.3 percentage points to 12.0 percent, and operating profit rose 9.8 percent from the previous quarter, Lotte Rental said. Adjusted operating profit, which strips out one-time items, came in at 97.2 billion won, up 6.6 percent from the same period last year.
Net profit for the period, however, fell 24 percent to 29.4 billion won. On an adjusted basis excluding one-time items and using the same methodology as the prior year, net profit for the period would have been 45.5 billion won, up 15.5 percent, the company said.
Cumulative nine-month adjusted operating profit reached 271.9 billion won and adjusted net profit for the period 118.1 billion won, both posting double-digit growth, the company said.
Lotte Rental attributed the profit growth to its core rental business, saying a higher share of high-yield products and improved cost efficiency drove gains across its auto long-term, auto short-term and Biz Rental segments.
The auto long-term segment posted sales of 430.5 billion won, up 6.2 percent year on year, with operating profit of 51.8 billion won and an operating margin of 12.0 percent. The long-term rental fleet grew 6.5 percent. The share of high-margin used-car long-term rentals rose from 15.1 percent in the third quarter of 2024 to 18.8 percent in the third quarter of last year, and further to 21.2 percent in the third quarter this year. Per-vehicle accident costs also declined consistently, the company said.
The auto short-term segment, which includes car-sharing, recorded sales of 93.1 billion won, up 12.0 percent, with operating profit of 12.9 billion won and an operating margin of 13.9 percent. Daily short-term rental revenue rose 19.3 percent, driven by growth in foreign visitor rentals and stronger domestic demand. The monthly short-term rental product "Mycar M" grew 63.0 percent, while the car-sharing service Lotte Rentacar G car expanded 6.8 percent.
In the Biz Rental segment, sales of core products — including office automation equipment, measuring instruments and forklifts — rose 12.4 percent. A portfolio restructuring focused on core products lifted operating profit 35.5 percent to 4.2 billion won, pushing the operating margin up to 9.2 percent.
The used-car sales segment generated sales of 206.4 billion won and operating profit of 24 billion won, maintaining a double-digit operating margin. Rather than rushing to sell premium inventory during the soft market conditions in July and August, Lotte Rental converted those vehicles into used-car long-term rentals first. The company said the decision reflected a focus on maximizing the vehicle life-cycle value — the total revenue a vehicle generates across its full life cycle from new-car rental through used-car rental to final sale — over short-term disposal gains.
Vehicles redirected to rentals generate rental income throughout their contract periods, laying the groundwork for future profit growth. From September, as the market stabilized, the company shifted to wholesale-focused sales to improve inventory turnover, and plans to optimize its sales portfolio around profitability in the fourth quarter.
Lotte Rental also expanded overseas and rolled out new services. After establishing a local subsidiary in Japan, the company partnered with Japanese rental firm Orix Auto and launched a short-term rental service for Korean tourists in Okinawa in July. In August, it signed a strategic alliance with global rental company Hertz, extending its overseas reservation service to 63 cities across eight countries. In September, Lotte Rentacar G car introduced a voice-activated reservation feature called "G car AI Booking."
"Even amid volatility in the used-car market, our structural improvements centered on the core rental business are translating into profit growth," a Lotte Rental official said. "We will continue expanding high-yield products and driving cost innovation to sustain stable growth as the No. 1 player in the mobility industry."
eyre@heraldcorp.com
